Core Insights - NVIDIA and Hyundai Motor Group are enhancing their collaboration to innovate in autonomous vehicles, smart factories, and robotics through a new AI factory powered by NVIDIA Blackwell [2][3] - The partnership will focus on co-developing AI capabilities for mobility solutions and semiconductor advancements, aiming to strengthen Hyundai's future capabilities [3][4] Investment and Infrastructure - The collaboration includes a $3 billion investment to develop Korea's physical AI landscape, supporting the government's initiative to build a national AI cluster [4][8] - Key infrastructure developments will include the establishment of an NVIDIA AI Technology Center and Hyundai's Physical AI Application Center, along with regional data centers [5][8] AI Technology and Applications - Hyundai Motor Group plans to utilize 50,000 NVIDIA Blackwell GPUs for integrated AI model training, validation, and deployment [4][9] - The partnership will leverage NVIDIA's Omniverse and Cosmos platforms to create digital twins of car factories and regional driving environments, enhancing production and autonomous driving capabilities [10][13] Future Mobility Solutions - Advanced AI models will be developed for over-the-air updates and innovative in-vehicle features, transforming vehicles into intelligent agents [14][15] - The collaboration aims to create a unified ecosystem for in-vehicle AI, autonomous driving, and factory automation, setting a new standard in the automotive industry [17]

Core Viewpoint - NVE Corporation's shares have experienced a 1.5% decline following the release of its second-quarter fiscal 2026 results, despite a 9.7% increase over the past month, indicating investor optimism about future growth prospects despite current revenue challenges [1] Earnings & Revenue Performance - Total revenues for the quarter ended September 30, 2025, were $6.35 million, a 6% decrease from $6.76 million in the prior year, primarily due to a 68% drop in contract R&D revenues, partially offset by a 1% increase in product sales [2] - For the first half of fiscal 2026, total revenues decreased 8% year over year to $12.45 million, with net income down 15% to $6.89 million, or $1.42 per diluted share [3] Operating Trends & Other Key Business Metrics - Gross profit for the quarter declined 14% to $4.97 million, resulting in a gross margin of 78%, down from 86% the previous year due to a less profitable product mix and increased distributor sales [4] - Operating expenses fell 7%, driven by a 23% decrease in SG&A costs, while R&D spending rose by 3% [5] Management Commentary - The CEO highlighted a 4% sequential revenue increase driven by strong growth in distributor and non-defense sales, despite a decline in defense-related business [7] - The company is shifting focus towards medical devices, industrial automation, and robotics markets, leveraging its spintronic sensors and couplers [8] Factors Influencing Performance - Revenue decline was mainly due to cyclical weakness in contract R&D, with a 21% rise in non-defense product sales partially offsetting a 64% decline in defense sales [11] - The lower gross margin was attributed to a shift in sales mix and a 45% year-over-year increase in the cost of sales due to heightened manufacturing activity [12] Outlook - Management is optimistic about continued growth in the December quarter and the second half of fiscal 2026, citing a healthy sales pipeline and favorable tax credits [14] - The company plans to spend an additional $1-$1.5 million on capital expenditures for production expansion [14] Other Developments - The board declared a quarterly cash dividend of $1 per share, payable on November 28, 2025, and reported the completion of new manufacturing equipment installation [16]